Normal No Spacing Shoe Stores caries a basic black dress shoe for women that sel

Question

Normal No Spacing Shoe Stores caries a basic black dress shoe for women that sells at an approximate constant rate of 500 pairs of shoes every 3 months. Keith's current buying policy is to order 500 pairs each time an order is laced. It costs Keith S30 to place an order. The annual holding cost rate is 20% (of the price per pair). With the order quantity of 500, Keith obtains the shoes at the lowest possible unit cost of $28 per pair. Other quantity discounts offered by the manufacturer are s quantity for the shoes (calculate TC including the cost of the shoes)? What are the annual sa inventory policy over the policy currently being used by Keith? Now resolve the problem using a fixed holding cost of $1.20 per pair per year. Hów does this affect your answer? hown below. What is the minimum-cost order vings of your Order Quantity 0-99 100-199 200-299 300 or more Price Per Pair S36 32 30 28 Focus English (uS)

Explanation / Answer

The Least total cost if for 300 quantity i.e. 57050.

Therefore, Total Savings = 57520-57050 = 470

2.

Existing Policy Annual demand 2000 Total Cost 28*2000 56000 EOQ Root(2CO/CC) Ordering Cost 30 2000/500*30 120 C Annual Demand Carrying Cost 5.6 1/2*500*28*.2 1400 O Ordering cost 57520 CC Carrying cost Discount Policy EOQ EOQ Quantity to take Discount Total Cost of Discounted Policy 1 Root[(2*2000*30)/(36*0.2)] 129 99 (2000*36)+(2000/129*30)+(1/2*129*36*0.2) 72944 Not Feasible Because Quantity is more. 2 Root[(2*2000*30)/(32*0.2)] 137 137 (2000*32)+(2000/137*30)+(1/2*137*32*0.2) 64888 3 Root[(2*2000*30)/(30*0.2)] 141 200 (2000*30)+(2000/200*30)+(1/2*200*30*0.2) 60900 4 Root[(2*2000*30)/(28*0.2)] 146 300 (2000*28)+(2000/300*30)+(1/2*300*28*0.2) 57050

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